PlayStation plunders Sony profits

57 per cent drop due to PS 2 development, marketing

Sony's profits continue to slide, dragged down by the titanic forces of the PlayStation 2 development and marketing budget.

The profit fall this time round was 57 per cent, taking the Japanese giant's earnings down to ¥19.8 billion ($183 million), or ¥21.7 per share. For the same period last year, Sony posted earnings of ¥46.5 billion, ¥113 a share.

The scale of the PlayStation 2's contribution to the fall is highlighted by Sony's rising sales in other sectors. Overall, sales rose nearly four per cent, to ¥1.69 trillion.

Digital cameras and VCRs proved particularly profitable for the company, but its PC and PC storage products formed the bulk of its sales - some 80 per cent of the total. Their sales grew 19 per cent year on year, the highest increase in sales of any Sony product sector.

Despite that, Sony's games division sucked out ¥2.8 billion in losses, down from a ¥28.1 billion net contribution to Sony's profits this time last year.

Sony maintains it will meet its forecasts for PlayStation 2 shipments, but it's going to have a tough time what with the current global component shortage. That has already forced Sony to limit sales in the US, where the PlayStation debuts today, such as halting online sales to ensure resellers get kit to sell.

There's no sign that this will improve much, and with the Christmas sales period looming, it couldn't have come at a worse time. Sony is clearly banking on demand for the console being sufficiently keen that punters will wait until the new year to buy one. We shall see... ®